Randy Pitchford, Founder and CEO of Gearbox [Photo: Courtesy of Gearbox]
Frisco-based game maker Gearbox Entertainment is being acquired by New York City-based Take-Two Interactive Software in a deal valued at $460 million. Consists solely of newly issued shares of Take-Two common stock.
Take-Two, one of the world's largest interactive entertainment companies, will acquire Gearbox from Sweden-based Embracer Group. Embracer Group acquired Gearbox in 2021 in a deal worth up to $1.3 billion at the time.
“Our partnership with Take-Two Interactive and 2K will help take Gearbox to the next level,” Gearbox Entertainment founder and CEO Randy Pitchford said in a statement. “Take-Two and 2K have repeatedly demonstrated their commitment to our engines of creativity, happiness, and profit. We work together arm-in-arm as partners to set the standard in interactive entertainment and create breakthroughs. We have achieved remarkable results in a record-setting game, and I am extremely excited about what we can accomplish now that we are fully aligned.”
According to Take-Two, the acquisition price assumes that the company will have normalized net working capital (excluding cash) and will be debt-free and cash-free at the time of completion. Take-Two added that the acquisition should be completed by June 30th.
Gearbox will operate as a studio within 2K, with Pitchford and his management team at the helm. The acquisition adds a “robust and proven development team” to 2K's highly talented developer community, including talent who have collaborated on multiple critically and commercially successful games. Also included.
Gearbox operates a studio in Frisco. Montreal, Canada. and Quebec City, Canada.
The Calypso Twins are coming to Gearbox's Borderlands 3 [Image: Gearbox Software and 2K Games]
Expanding a proven video game franchise
“Our acquisition of Gearbox is an exciting moment for Take-Two, bringing together industry-leading creative talent and the iconic Border “This will strengthen our portfolio of intellectual property, including the 'Rands' franchise.” statement. “This combination strengthens the financial profile of our existing projects with Gearbox and opens opportunities to drive long-term growth by maximizing Take-Two’s resources across all of Gearbox’s exciting initiatives. Masu.”
Take-Two said it expects this agreement to further deepen its successful relationship with Gearbox Entertainment and increase financial returns through a fully integrated operating structure. Take-Two has acquired full ownership of the critically and commercially acclaimed Borderlands and Tiny Tina's Wonderlands franchises, as well as future pipelines for Homeworld, Risk of Rain, Brothers in Arms, Duke Nukem, and Gearbox. Gain access to Gearbox's extensive intellectual property portfolio.
Currently, Gearbox has six major interactive entertainment projects in various stages of development, including five sequels (two of which are from the Borderlands and Homeworld series) and at least one exciting Contains new intellectual property. Beyond these plans, Take-Two said it believes there will be more opportunities to invest in new projects and expand Gearbox's proven franchise.
“With a nearly 20-year history of collaboration, Gearbox has played an integral role in our success with its unique ability to create interactive entertainment experiences featuring beloved characters, exciting new worlds, and humorous storytelling. 2K President David Ismailer said. “We are thrilled to welcome Randy Pitchford and his team of passionate and talented developers to 2K and look forward to releasing many more projects as colleagues. We have loved partnering with Gearbox on each edition of the Borderlands series and are excited to be actively developing the next installment in the series.”
Depreciation and restructuring
According to PocketGamer.biz, Gearbox's $460 million sale reflects a significant write-down from the potential $1.3 billion Embracer acquired in 2021. According to a report on the B2B site, Embracer required him to pay $363 million upfront to acquire the studio, of which $175 million was paid in Embracer stock. The remaining potential acquisition cost will be determined based on performance.
PocketGamer said the sale of Gearbox after three years was part of Embracer's restructuring, which was stepped up after the group's share price fell 45% last spring. PocketGamer added that Embracer has laid off 1,400 staff across the studio.
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